San Diego Port Moves to Separate Pension Funds

A news report in the San Diego Daily Transcript said
port commissioners have outlined their desire in a letter
to the San Diego City Employees Retirement System (SDCERS),
the administrator of one trust that includes the pension
funds of the city of San Diego, the port and the San Diego
County Regional Airport Authority.

Port Commission board chairman William Hall sent the
letter to SDCERS Administrator Lawrence Grissom, outlining
the desire to move the port’s $141 million in retiree funds
into a separate account and choose a separate board of
administrators to preside over it.

“I’ve got a fiduciary responsibility to the employees of
the port,” Hall told the Daily Transcript. “We should also
have the decision to make independent investment decisions
on behalf of the employees.” Hall specifically said that
one of the primary motivators is protection of port
retirees if the city should declare bankruptcy. In the
event that the city got into problems and the city went
bankrupt, that would perfect the separation,” Hall said.
“It’s highly unlikely the port funds would be put in
jeopardy.”

Sylvia Rios, secretary for the board of port
commissioners, said the port’s pension money is a “drop in
the bucket” for the $3.4 billion SDCERS system. The city is
currently facing a $1.37 billion deficit in the pension
that has been beset by nearly continuous scandal and
upheaval.

Paul Barnett, assistant administrator of the retirement
system, said the action would require a vote by the SDCERS
board of administrators, Barnett said.

Michael Conger, counsel for the San Diego Harbor Police
Officers Association, said the move by the port board is
two years too late to separate itself from the city’s
account, which he called a “sinking ship.” “I would caution
them to move it at all dispatch because the employees that
have their money there will hold the port accountable if
anything happens,” Conger told the Daily Transcript.

Other members of the port board were not as openly
critical as Hall or Conger, and touted the action as a
prudent move to protect its retirees.

“Obviously there is a lot of discussion on SDCERS, we
want to make sure that our employees and retirees’ funds
are absolutely secure,” said Port Commissioner Stephen
Cushman. “This isn’t meant to throw any rocks, we simply
believe that this is an appropriate time for us to create a
separate trust.”